Part of the reason that insurance is low and relatively lenient in what you insure is because they rely upon the fact that you are going to be inspected every year to make sure that your vehicle is in proper working order. I know for a fact that identical vehicle to identical vehicle, its more expensive to insure in Ohio than it is in Pennsylvania.
If there was no registration and inspection of our vehicles, the insurance company would go absolutely crazy over them and most likely require their own people to do checkovers of any vehicles that are insured. You damn well know that if they have a financial interest in the well being and proper function of your vehicle, they are going to be Nazi-ish in their inspections of them. At least, they will be far more interesting in the integrity of the vehicle than current inspection stations are because of the financial investment they have in that car being able to run well.
Long story short, there is not an easy solution to this. Removing registration and inspection does not solve the problem. Emissions though, especially for anything 96 and newer, is fucking retarded.